Bodnar v. Community Savings Credit Union

Bodnar v. Community Savings Credit Union

The Court applied the purposive interpretation from Garland: overdraft fees that, in substance, operate to increase the effective cost of credit are "interest" under s.347; because the statutory definition treats an "overdraft charge" as a charge not exceeding $5, any fee exceeding $5 cannot qualify as an "overdraft charge" and therefore the entirety of such a fee constitutes "interest"; the correct inquiry is the effect on the borrower, not the lender's stated purpose.

Citation
2018 BCCA 121
Parties
Respondent (plaintiff): Andrew Bodnar; Respondent (plaintiff): John Humphrey; Appellant (defendant): Community Savings Credit Union; Appellant (defendant): North Shore Credit Union; Appellant (defendant): Chemainus Credit Union; Appellant (defendant): Comox Valley Credit Union; Appellant (defendant): Kootenay Savings Credit Union; Appellant (defendant): VantageOne Credit Union; Appellant (defendant): Village Credit Union; Appellant (defendant): Greater Vancouver Community Credit Union; Appellant (defendant): Coastal Community Credit Union; Appellant (defendant): Vancouver City Savings Credit Union
Court
British Columbia Court of Appeal
Jurisdiction
Canada
Judgment Date
3 April 2018
Procedural Posture
Class Action Appeal Regarding Statutory Interpretation of Criminal Code S.347 / Appeal From Summary Trial Decision of the Supreme Court of British Columbia (declaration Affirmed)
Outcome
Appeal dismissed.
Legal Topics
Overdraft Fees, Definition of Interest Under Criminal Code S.347, Statutory Exemptions (overdraft Charge), Effect Vs Intent in Characterization of Charges
Source Language
English
Criminal Law Banking and Finance Class Actions Statutory Interpretation Consumer Protection Overdraft Fees Definition of Interest Under Criminal Code S.347 Statutory Exemptions (overdraft Charge) +1 more

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Parties

Andrew Bodnar

Respondent (plaintiff)

John Humphrey

Respondent (plaintiff)

Community Savings Credit Union

Appellant (defendant)

North Shore Credit Union

Appellant (defendant)

Chemainus Credit Union

Appellant (defendant)

Comox Valley Credit Union

Appellant (defendant)

Kootenay Savings Credit Union

Appellant (defendant)

VantageOne Credit Union

Appellant (defendant)

Village Credit Union

Appellant (defendant)

Greater Vancouver Community Credit Union

Appellant (defendant)

Coastal Community Credit Union

Appellant (defendant)

Vancouver City Savings Credit Union

Appellant (defendant)

Procedural Posture

Class Action Appeal Regarding Statutory Interpretation of Criminal Code S.347 / Appeal From Summary Trial Decision of the Supreme Court of British Columbia (declaration Affirmed)

Legal Issues

  1. 1 Whether overdraft fees in excess of $5 constitute "interest" under s.347 of the Criminal Code
  2. 2 Whether the first $5 of an overdraft fee exceeding $5 is excluded from "interest" as an "overdraft charge"
  3. 3 Whether a fee charged to assess an overdraft (even if charged when overdraft is not ultimately honoured) is "for the advancing of credit"

Ratio Decidendi

The Court applied the purposive interpretation from Garland: overdraft fees that, in substance, operate to increase the effective cost of credit are "interest" under s.347; because the statutory definition treats an "overdraft charge" as a charge not exceeding $5, any fee exceeding $5 cannot qualify as an "overdraft charge" and therefore the entirety of such a fee constitutes "interest"; the correct inquiry is the effect on the borrower, not the lender's stated purpose.

Court Disposition

Appeal dismissed.

Orders

  • Declaration that the entirety of an overdraft charge exceeding five dollars constitutes "interest" for the purposes of s.347 of the Criminal Code (order of the Supreme Court of British Columbia affirmed)